Successful restaurants have a few things in common. It starts with an understanding of the restaurant business, food people want to eat, and a good marketing strategy. Marketing your restaurant is more important now than it ever has been. Restaurants are popping up everywhere, even without having a physical location! Heck, Louis Vuitton is even getting into the industry. It’s 2020 — anything can happen. Your competition is everywhere, so relying on word of mouth isn’t going to cut it anymore. The question is, how do you market yourself to stand out, and how much should you be spending? We’re here to help you.
As you well know, marketing is not a one-size-fits-all scenario. The goals, size, location, and age of your restaurant will all play a factor in how you market, where you market, and how much you spend doing so. Where do you start?
What are your goals?
First, you need to determine the goals of your marketing. Are you a brand new restaurant in town needing to create a strong customer base? Are you a well-established place looking to thicken that bottom line? Whatever the case may be, you need to have your objectives in line first, before you can start diving into creating a solid marketing plan.
Examples of goals you might have:
• Generate new customers.
• Create repeat customers.
• Increase the restaurant’s average check amount.
• Get more online orders.
It’s easy to say “Yea, I’d like for all of those things to happen”, but you need to really focus on one big goal at a time or your marketing will start to dilute itself. However, that’s not to say that some of your goals won’t overlap and work together.
For instance, you can have your goal be to create more repeat customers but you also want to increase sales and jumpstart your online ordering program, too. Within your main goal, you’ll be able to list out how you can make that happen: send out an email to past customers offering a promotion, create a VIP program, retarget people that follow you on social, etc. You’ll start to notice that by creating repeat customers, you’ll also be increasing sales. You can also throw in a promotion like “free delivery when you order online” to your email list. So now you’re creating repeat business and increasing sales, AND you’re boosting your online orders. However, as stated above, it’s important that you don’t focus your attention on too many goals or you’ll start to become less effective.
How much should you spend?
On average, small businesses spend about 7–10% of their sales on marketing. According to the National Restaurant Association, the average restaurant typically spends 3% of its total revenue on marketing. It’s interesting to see how much fewer restaurants spend on marketing than other small businesses. This is likely due to the large overhead costs of running a restaurant, but it’s still important to note that you must invest in marketing if you’re looking to beat out your competition and survive.
So, is 3% enough? How much you spend on marketing will be a percentage of your gross annual revenue. Finding that percentage is going to be based on a few different factors.
1. You’re a brand new restaurant.
If you’re brand new, you’ll have to spend a little more to get your name out there and generate buzz. No need to cringe, though. You have to keep the mindset that marketing makes you money. You have to spend money to make money. It’s necessary to get your initial group of guests and if they don’t know you exist, they can’t eat your food.
We suggest spending: 25–30% of your projected revenue.
2. You’re established and growing.
Yay! You have a good base of customers and you’re still gaining more! This is great news but not an excuse to stop marketing. You want to play into your momentum.
We suggest spending: 5–12% of your revenue. The more competition you have, the higher the percentage you should be spending. Over time, you’ll be able to see how playing with your budget will directly affect revenue.
3. Your sales have become stagnant or declined.
If your sales haven’t grown in a while, its time to vamp up your marketing efforts (and most likely take another look at your restaurant as a whole). If your revenue starts to decline, you need to up your marketing spend even more for at least six months. It’s easy for you to panic and automatically cut your marketing budget but this isn’t the answer. Instead, take a look at your product waste or play around with your labor costs to save a few bucks.
We suggest spending: 3–10% more than your current spending.
If this is completely out of the question, you’re going to have to expect to spend more time and effort coming up with a marketing plan that includes guerrilla marketing and other cheaper alternatives. For instance, social media is completely free to use. Yes, organic reach is definitely down, but you can start creating engaging content, adding in stories and videos to the mix and you’ll start to see a return on your time invested.
Where should you spend your marketing dollars?
Once you have a goal and a budget, it’s time to figure out where to spend that allocated money. Let’s take a look at last year. Where did restaurants spend their money in 2019?
• 67% paid for social media ads
• 53% paid for community, event, or charity sponsorships
• 42% paid for Google or search engine ads
• 32% paid for newspaper or magazine ads
Should you follow suit? Each restaurant and circumstance is so different that it’s impossible to say what one strategy will work for all. You’ll need to play around a bit to find your sweet spot. If you have absolutely no idea where to begin, Eater Creative can do this for you. We’ve helped many restaurants come up with the perfect marketing plan catered specifically to them.
To start, there are a couple of types of marketing you should understand first:
• Incentive Marketing
If you’re new to marketing and are adamant about doing it yourself, a comforting place to start for most restaurant owners is with marketing that can be easily tracked. This usually means using incentives. Incentive marketing can get pricey because you’re taking a direct hit because you are offering a discount, but the math is easily calculated. When you run an ad on social media with a discount code or send an email with a coupon, you are able to directly see how many people the ad/email reached and how many people turned into customers. However, something you want to watch out for is overusing incentives. Customers can get used to discounts, resulting in a discount-only type of customer loyalty. You don’t want that.
Perhaps a more sustainable way to market is through directional marketing. Directional marketing is putting yourself in front of customers and directing them to your restaurant. An example of this is putting an ad on Yelp. Customers are already there looking for a place to eat when your ad directs them to take action at your restaurant.
This type of marketing is harder to track because the simple math isn’t there. Sure you can track clicks and eyes but it’s harder to track actual decisions. Vigilant restaurant owners will hand out surveys to help them see where customers come from.
There are so many great ways to market but since restaurants usually have lower profit margins, you should make sure you utilize your cheaper options. If you had to choose just one channel to market through (although we don’t recommend putting all your eggs in one basket), we suggest social media. Right now it’s the best bang for your buck. Part of marketing is meeting your customers where they’re at, and 76% of internet-using Americans are on social. It’s great for updating your customers on new menu items, informing them of events, and handling customer reviews.
There are different ways you can use social media to your benefit. You can post organically which means you aren’t paying for it. This is necessary for the longevity of your brand. If you choose to just post organically, you can expect to have slow growth, and sometimes that just won’t cut it.
When an organic post is performing extremely well, this is a good time to boost that post in order to reach a bigger audience. This means you are paying for reach and can be beneficial to your brand.
Paid ads are similar to boosted posts in that you are paying to reach a bigger audience. However, when you create an ad you are able to customize your target audience more than if you were to create a post and boost it. This option also allows you to create lead forms and to retarget people that have taken a specific action (i.e. liking your Facebook page or checking into your restaurant).
Google/ Search Engine Ads
Showing up at the top of a search engine is a great way to ensure people know about your restaurant. Google alone sees 3.5 billion searches a day! The great thing about paying for search engine ads is that you are showing up when people are ready to buy. They’re seeking you out, whereas on social media you’re showing up out of the blue and hoping that they’re hungry enough to take action (or will remember you when they are).
When you’re going about buying keywords you want to keep a couple of things in mind:
• What’s the monthly search volume? (Are there even enough searches to make it worth your while?)
• How much competition is there? (If there’s too much competition it won’t be profitable.)
• What is the Cost Per Click per keyword?
• Is it relevant to your restaurant’s food services?
You can always add and take away keywords. It’s going to take some initial testing to get the right combination, but you want to make sure that the keywords you use are going to get people to your restaurant at a cost that makes it worth it.
Print Advertising/ Direct Mail
Contrary to popular belief, print advertising is not dead. Advertising in a local newspaper or sending out direct mail can be very successful. The upside to print advertising and direct mail is that it can get hyper-local. Since restaurants want to target local customers, putting an ad in the local newspaper or sending a menu in the mail to surrounding neighborhoods can be a great option.
The downside to this approach is that it can be hard to track and gets costly. Costs typically include ad design, ad space, and (if you’re doing direct mail) shipping costs. You can expect an ad in the local newspaper to cost anywhere in the hundreds to thousands depending on the size of the ad.
Something to keep in mind about advertising in a local paper or magazine is where you are located. If you are located in a popular vacation place where tourists likely pick up the local papers to see what’s going on, this might be a great place to advertise. There are often yearly publications where you can advertise in your local visitor centers. This is the perfect place to show off your restaurant to those out-of-towners looking for a good place to eat.
Pro-Tip: Many local newspapers will print your entertainment and daily specials for FREE in a dedicated section if you update them with your weekly/monthly calendars!
Content Marketing & Blogging
So many restaurants forget about adding content to their websites in the form of blogs. This is your place to share new recipes (without giving away your secret sauce, of course), your chef’s background story, and document your community involvement. While blogging might not drive people to your restaurant immediately, it certainly builds brand awareness, gives you content to post to social media, and shows Google that your website is being constantly updated which aids in SEO efforts.
With all this being said, it is more important to have a solid marketing plan with knowledge of where to spend your money, than how much money you actually spend. You can do a lot with a little. Your restaurant is unique and your marketing plan should be too. Every 2–3 months you need to reevaluate your efforts because marketing should never be put on auto-pilot. Dedicate 10% of your marketing budget to trying new things and leave the rest for what you know works for you! You never know what perfect combination you might come up with, and if you need a little help, Eater Creative is experienced at putting together marketing strategies that work.